Maryland's General Assembly dramatically improved the state's hopes of winning a multibillion-dollar lawsuit against the tobacco industry yesterday, enacting a bitterly disputed measure to hamper the industry's ability to defend itself in court.
Lawmakers effectively overturned a recent circuit court ruling that undermined the state's case. They rewrote the law to permit Maryland to seek compensation for huge sums paid for smoking-related illnesses without having to produce individual victims in court. They also barred cigarette makers from claiming that smokers caused their own illnesses by choosing to smoke.
The tobacco bill was one of several important measures adopted on a hectic final day for the General Assembly. Before adjourning at midnight, lawmakers also provided enhanced pension benefits for state employees, gave final approval to a plan to control the runoff of pollutants into the Chesapeake Bay, and approved a $140 million school construction plan for Prince George's County. In a surprise move aimed at controlling development, lawmakers imposed new water and sewer fees on builders in the Washington suburbs.
Supporters of the tobacco bill said it could prompt similar legislative efforts in other states. Maryland is one of about 40 states suing cigarette makers to recoup Medicaid payments made for smoking-related illnesses in recent decades.
During a short but emotional debate in the House, Del. Kenneth C. Montague Jr. (D-Baltimore) urged support "on behalf of the thousands of people over the course of several decades who have had their lives destroyed" by cigarettes and what he called the industry's fraudulent tactics.
"That fraud has cost the taxpayers billions of dollars, and they want it back," Montague said.
But the vote infuriated key business groups, and opponents vowed to challenge it in court on grounds that it unfairly changes legal rules in the middle of a lawsuit.
"It is a most dangerous and unsettling precedent," Del. D. Bruce Poole (D-Washington) said during the debate. It would dismay the late Supreme Court Justice Thurgood Marshall, a native Marylander, "who stood for a lot of unpopular causes and a lot of unpopular defendants," Poole said.
With state revenues soaring because of the economy, the 1998 General Assembly ended on a largely positive note, as new spending initiatives helped ease earlier tensions over ethics controversies.
During the 90-day session, legislators reduced income taxes while also appropriating record sums for classroom programs, school construction, children's health insurance and the developmentally disabled. They closed the session yesterday with a flurry of bills, including one requiring elementary school students to be notified 48 hours before any pesticide spraying at their schools, a measure long sought by parents' groups, and another waiving for victims of domestic violence the normal one-year waiting period to obtain a divorce.
Several hotly debated measures did not survive the final hours of the session. Despite negative publicity this year about alleged ethical infractions by legislators, the legislature would not approve a proposal aimed at helping lawmakers avoid conflicts of interest. And lawmakers killed legislation requiring Maryland to open up its electricity business to competition starting in 2000. Regulators already have proposed such a plan.
Still, Gov. Parris N. Glendening (D) and many of the assembly's 188 members are hoping the session will provide them a strong reelection platform in this fall's statewide elections.
"It started bleak and dreary" because of the ethics cases, but "we're closing on a bright, sunshiny spring day," said Senate President Thomas V. Mike Miller Jr. (D-Prince George's). "All's well that ends well."
The tobacco legislation was initially proposed by Maryland Attorney General J. Joseph Curran Jr. after a Baltimore Circuit Court judge issued a ruling highly detrimental to the state's case. The judge said Maryland must bring thousands of individual smoking victims to the stand to prove its case, presenting a barrier that state lawyers said would prove nearly impossible to surmount.
Curran said the ruling was misguided and needed "clarification" on approval of a bill to change the rules for Maryland's suit against the tobacco industry in the form of a new state law. The measure, approved yesterday, essentially would set aside the court ruling and allow the state to prove its case by using "statistical evidence" of smoking-related diseases and costs, an easier case to make.
Republicans uniformly denounced the measure as unfair to businesses. Meanwhile, some moderate and liberal Democrats -- mostly lawyers -- said legislators shouldn't tamper with court decisions simply because they deal with unpopular defendants. And in the final days, the legislation was nearly derailed by a dispute over the hundreds of millions of dollars in fees that could go to the state's top lawyer, Peter G. Angelos.
On Saturday, Angelos, owner of the Baltimore Orioles, put passage of the bill in doubt by denouncing the part of the legislation that could reduce his eventual fee. When hired by the state two years ago, Angelos agreed to spend millions to launch the suit in return for a 25 percent contingency fee. That could mean a $1 billion fee if the state wins a $4 billion judgment, which analysts say is possible.
Angelos recently agreed to cut his fee to 12.5 percent. But he criticized a Senate-backed amendment that directs a judge to review, and possibly reduce, the eventual fee. House leaders said yesterday they had to leave the fee amendment intact in order to win passage of the overall bill.
Yesterday, Angelos's representatives said he and the state will settle the fee dispute later, possibly in a separate lawsuit. Then, with Angelos and Glendening doing some last-minute lobbying for the measure, the House endorsed the bill, with the crucial language passing 75 to 59. That was only four more votes than the minimum needed for passage in the 141-member House. The overall bill later passed by a slightly larger margin. The Senate had approved the measure last week.
Curran said yesterday's vote may have a domino effect. "Other states can now look to Maryland as having had a full, open and complete debate" that resulted in legislation helping anti-tobacco lawsuits, Curran said.
But critics said the General Assembly was setting a dangerous precedent by targeting an industry mainly because it's deeply unpopular.
"We're changing the rules for a corporation we consider evil," Del. Rushern L. Baker III (D-Prince George's) said in the floor debate.
Del. Dana Lee Dembrow (D-Montgomery) said the action will delay the state's lawsuit for years by inviting constitutional challenges. "There will be an army of high-priced lawyers who are going to go into court and argue successfully that this bill violates equal protection," he said.
Supporters of the bill said the cigarette industry has fraudulently pursued customers by hiding evidence of tobacco's addictive and harmful properties.
Del. Barbara Frush (D-Prince George's) told her House colleagues: "It's payback time."
Several non-tobacco business groups had staunchly opposed the bill. They worry that future legislatures will pass measures weakening the legal rights of other unpopular commodities, such as alcohol or chemicals.
"It's this kind of unfortunate predilection on the part of the General Assembly that has business people in other states scratching their heads, saying, 'What is Maryland's attitude toward business?' " said Champe C. McCulloch, president of the Maryland Chamber of Commerce, which lobbied heavily against the bill.
Yesterday's developments capped a legislative session that opened in mid-January under a cloud of ethics controversies. Two days after the opening gavel, the Senate expelled Larry Young (D-Baltimore) on charges that he used his legislative position for private gain. The unprecedented expulsion was followed by the resignation of a House committee chairman who was accused of pressing a state agency to adopt an insurance program that benefited him.
Legislators -- many of whom have full-time jobs outside the legislature -- worried aloud about how to avoid conflicts of interest when dealing with professions and constituents that are affected by state government.
House and Senate leaders called for a year-long study of the matter, reluctant to take far-reaching steps promptly. And last night, the main piece of legislation aimed at responding to the problem died after a Senate committee refused to consider a House measure to establish a legislatively controlled staff to advise members on ethics guidelines and precautions.
If ethics problems made legislators uneasy, a rising tide of tax revenue made much of their work easy and unusually pleasant. The state's budget surplus grew with each updated projection, and lawmakers used the bonanza to enact a host of popular programs.
They include a 5 percent income tax cut this year, $222 million in school construction aid, new health insurance for 60,000 low-income children and pregnant women, and millions of dollars for higher education.
The General Assembly yesterday gave final approval to a more lucrative pension plan for 115,000 state employees and public school teachers, even though Republican critics complained the proposal had been slapped together and not thought out.
But proponents noted the proposal had been studied by the state pension board. In an election year, lawmakers were eager to pass improvements long sought by government employees, who have complained for years that Maryland's pension system was among the nation's worst.
Now, a state worker who retires after 30 years with a final salary of $40,000 earns an annual pension of $11,847. Under the new system, the employee will receive $14,400. The plan also includes a 3 percent cost-of-living adjustment for current and future retirees.
The plan requires a mandatory 2 percent contribution from employees but also requires the state to match up to $600 a year in an employee's retirement savings account. That match would not apply to teachers.
"Many of these promises would not be made except in an election year," said House Minority Whip Robert L. Flanagan (R-Howard).
But Appropriations Committee Chairman Howard P. Rawlings (D-Baltimore) said help for government workers was past due. "It's going to help teachers and state workers," he said.
Miller called the accomplishments by the legislature this year -- and the likely impact on incumbents seeking reelection -- "huge."
"There has not been a tax increase or new taxes in the last four years," he said. "To the contrary, we've cut taxes." In addition, the surplus allowed new spending on education, the environment and a host of popular issues. "We've pushed all the right buttons."
Staff writer Robert E. Pierre also contributed to this report.
Actions of Maryland's General Assembly
The 1998 General Assembly, which was scheduled to adjourn last night, took these actions during its 90-day session:
Taxes
Approved a 5 percent income tax reduction for this year, rather than the 2 percent originally scheduled. Expanded the earned income tax credit for the working poor.
Pfiesteria
Imposed eventual mandatory controls on farmland runoff to combat the fish-killing microbe Pfiesteria piscicida. Required the enzyme phytase to be included in chicken feed to reduce phosphorus in manure. Required some Eastern Shore chicken manure to be transported to distant croplands.
Education
Appropriated $67 million annually in new school operating funds, with Prince George's getting the largest share, $18 million.
Children's health
Provided health insurance to about 60,000 children and pregnant women from low-income families, at an initial state cost of $29 million a year.
Higher education
Approved $663 million in new higher education spending over four years.
Scholarship
Approved state-paid college scholarships for recent high school graduates with B averages who primarily study technology, computers and science. The recipients must agree to work in Maryland one year for each year they receive the money. Plan will eventually cost $10 million annually.
New drivers
Subjected teenage drivers to a midnight curfew for 18 months rather than 12 and provided tougher sanctions for traffic violations. Required all new drivers, including adults, to take a driver's education course.
Milk
Enrolled Maryland in a regional milk producers' compact, designed to shore up prices for dairy farmers. Critics say consumers will pay more for milk.
Needle exchange
Allowed Prince George's health authorities to give clean hypodermic needles to drug users, in an effort to combat AIDS.
Abortion
Rejected a proposed ban on "partial birth" abortions. Allowed the expanded children's health program to cover state-paid abortions.
HMOs
Required HMOs to staff an internal appeals office for complaints about the denial of coverage. Rejected a proposal to let patients sue HMO medical directors for denying coverage of disputed services.
Workers' compensation
Barred injured workers from collecting compensation if they were drunk or on illegal drugs at the time of injury.
Disabled
Agreed to provide $65 million over five years to provide needs for developmentally disabled adults.
Drunken driving
Rejected a proposal to reduce the blood alcohol level for legal intoxication to 0.08 percent from the current 0.10 percent.
Concert hall
Earmarked $25 million in state aid for a 2,000-seat concert hall at Strathmore Hall in Montgomery County.
Cigarette tax
Rejected an effort to increase cigarette taxes by $1.50 per pack.
Nigeria sanctions
Killed a proposed ban on state business with Nigeria, or with companies doing business in Nigeria.
Potato famine
Declined to require public schools to teach about the Irish Potato Famine.
Health mandates
Required insurance plans that provide prescription drug plans to pay for contraceptives and birth control devices. Insurers also must pay for experimental treatments that are part of clinical trials and for treatment for children born with cleft palates.
Organ transplants
Gave members of transplant groups, instead of medical personnel, responsibility for soliciting organs from the relatives of a deceased person. Part of an effort to increase number of organs available for transplantation.
Salaries
Kept Maryland governor's salary flat at $120,000 for four years. Meanwhile, lawmakers accepted without a vote a $1,809 legislative raise, amounting to a little more than 6 percent over four years. Judges will get an $11,275 raise next year.
Tobacco litigation
Made it easier for Maryland to pursue its lawsuit against cigarette makers. Bill would also cut lawyer Peter Angelos's fee to 12.5 percent, rather than 25 percent, of any verdict.
School construction
Earmarked $222 million for public school construction next year, with Montgomery County slated to get about $50 million and Prince George's County $35 million.
State dinosaur
Designated the Astrodon johnstoni as the official state dinosaur.
Pensions
Enhanced pension benefits for state workers.
Prince George's schools
Approved a $140 million, four-year school construction package for Prince George's, provided that all parties settle the long -- standing desegregation suit.
Ethics
Killed legislation to set up full-time staff to counsel lawmakers about how to comply with state ethics laws.
Maryland and Tobacco
The Maryland House of Delegates gave final approval yesterday to a measure that would make it easier for the state to pursue its multibillion-dollar lawsuit against tobacco manufacturers. On the key vote, the House voted 75 to 59 to endorse Senate language allowing the state to prove its case using "statistical evidence" of smoking-related diseases and costs, instead of victim by victim. The bill also would bar tobacco companies from claiming that patients caused their harm by choosing to smoke. Here's how Washington area delegates voted on the language, with "yes" signifying support and "no" opposition.
YES
Kumar Barve (D-Montgomery)
Joanne C. Benson (D-Prince George's)
Leon G. Billings (D-Montgomery)
Elizabeth Bobo (D-Howard)
Michael E. Busch (D-Anne Arundel)
Joan Cadden (D-Anne Arundel)
Virginia P. Clagett (D-Anne Arundel)
Mary A. Conroy (D-Prince George's)
Michael A. Crumlin (D-Prince George's)
Dereck Davis (D-Prince George's)
Nathaniel Exum (D-Prince George's)
Peter Franchot (D-Montgomery)
Barbara Frush (D-Prince George's)
Gilbert J. Genn (D-Montgomery)
Marilyn Goldwater (D-Montgomery)
Michael R. Gordon (D-Montgomery)
Sharon Grosfeld (D-Montgomery)
Anne Healey (D-Prince George's)
Henry B. Heller (D-Montgomery)
Sheila Ellis Hixson (D-Montgomery)
Carolyn J.B. Howard (D-Prince George's)
James W. Hubbard (D-Prince George's)
Brenda B. Hughes (D-Prince George's)
John A. Hurson (D-Montgomery)
Cheryl C. Kagan (D-Montgomery)
Nancy K. Kopp (D-Montgomery)
Adrienne Mandel (D-Montgomery)
Pauline H. Menes (D-Prince George's)
Brian Moe (D-Prince George's)
C. Anthony Muse (D-Prince George's)
Richard A. Palumbo (D-Prince George's)
Obie Patterson (D-Prince George's)
Shane Pendergrass (D-Howard)
Marsha G. Perry (D-Anne Arundel)
Carol S. Petzold (D-Montgomery)
Joan B. Pitkin (D-Prince George's)
James E. Proctor Jr. (D-Prince George's)
Mark K. Shriver (D-Montgomery)
Frank S. Turner (D-Howard)
David M. Valderrama (D-Prince George's)
Joseph F. Vallario Jr. (D-Prince George's)
NO
Rushern L. Baker III (D-Prince George's)
Robert C. Baldwin (R-Anne Arundel)
Raymond Beck (R-Montgomery)
Phillip D. Bissett (R-Anne Arundel)
Michael W. Burns (R-Anne Arundel)
Barrie S. Ciliberti (R-Montgomery)
Jean Cryor (R-Montgomery)
Dana Lee Dembrow (D-Montgomery)
Patricia Anne Faulkner (R-Montgomery)
Robert L. Flanagan (R-Howard)
Janet Greenip (R-Anne Arundel)
Thomas E. Hutchins (R-Charles)
Robert H. Kittleman (R-Howard)
Richard La Vay (R-Montgomery)
John Leopold (R-Anne Arundel)
Samuel C. Linton (D-Charles)
Mary Ann E. Love (D-Anne Arundel)
Van T. Mitchell (D-Charles)
John S. Morgan (R-Howard)
Mathew Mossburg (R-Montgomery)
Anthony J. O'Donnell (R-Calvert)
George W. Owings III (D-Calvert)
James E. Rzepkowski (R-Anne Arundel)
Victoria L. Schade (R-Anne Arundel)
John F. Slade III (D-St. Mary's)
John F. Wood Jr. (D-St. Mary's)
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